Mr. PHIPPS. No, sir.

Mr. RAKER. That is, as manager for the directors of the corporation?

Mr. PHIPPS. The Nevada-California Electric Corporation is a rather inactive holding company, that merely collects the interest and dividends from these underlying companies, and, in turn, purchases their bonds, as they may be approved by the railroad comnission of California, or any other authorities that may have jurisdiction in the matter; and we sort of combine the statements and do a little bookkeeping, and combine the things together and put everything in one pot.

Mr. RAKER. I see; and you handle the finances as treasurer of the whole concern?

Mr. PHIPPS. Yes, sir; that is, of the Nevada-California Electric Corporation.

Mr. RAKER. I take it for granted that, of course, you people are very much interested in hydroelectric development?

Mr. PHIPPS. Well, this is a little company; we are a very small frog in the puddle. I think there are four or five public utility companies in the State of California alone that are larger than our company is.

Mr. RAKER. Well, take the holding company: With all the others. it makes quite a little frog in the puddle, does it not?

Mr. PHIPPS. But it is small, in comparison with the other public utilities companies in California.

Mr. SWING. You hope to grow, of course?

Mr. PHIPPS. Well, Mr. Swing, our prosperity is dependent upon the prosperity of your constituents and the constituents of Mr. Raker, and others in California.

Mr. RAKER. Provided that you do not take all of our water along up the eastern side of the Sierra Madre Mountains so that we can not have a little of it to use; we want just a little of it. But I suppose that you folks, after going into the matter generally and hearing the discussions, are prepared to continue your development in California and in Nevada and even in Arizona?

Mr. PHIPPS. Well, I believe we have no investment in the State of Arizona, we are wholesaling power to others there, who purchase power from us at rates that, I believe, are fixed by the California public utilities commission, known as the railroad commission of California.

Mr. RAKER. Yes.

Mr. PHIPPS. And, in turn, the purchasers are selling that power at rates which are fixed, as I understand it, by the Arizona Public Service Commission.

Mr. RAKER. Well, do you gather from the operations of your company and the others, that they feel as though the development of the Colorado River should be left to them, rather than the Federal Government to do the work?

Mr. PHIPPS. Well, I have never conferred with any representatives of any other companies in the matter.

Mr. RAKER. How about your own company? Does it feel that way?

Mr. PHIPPS. Mr. West made a statement this morning along those lines.

Mr. RAKER. Do you confirm and approve that idea as presented by Mr. West?

Mr. PHIPPS. Well, I had not given the matter any particular thought until I came on here. I do not believe I had seen a copy of the Swing-Johnson bill until I came on here the other day.

Mr. RAKER. Then I take it from your statement that, so far as you are concerned, and so far as you know, so far as your company is concerned, they are not taking any active part, or any part, relative to the question whether a corporation should develop the Colorado River, or whether the Government should do it?

Mr. PHIPPS. We had done nothing until we came on here to Washington to appear, at the request of the committee. I was here a month ago, and I was not personally sufficiently interested in the matter, one way or the other, to even look into the matter.

Mr. RAKER. I see.

You left that to others?

Mr. PHIPPS. Well, the operating men naturally know most about the operating end of the business. I suppose when it comes to the matter of a sale of a block of bonds Mr. West

Mr. RAKER (interposing). They are pretty active gentlemen, are they not?

Mr. PHIPPS. Well, you can judge for yourselves.

Mr. RAKER. From what I had seen, I had formed that opinion. Mr. PHIPPS. I think Mr. West will appreciate the compliment.

The CHAIRMAN. You look after the financial end of your company? Mr. PHIPPS. Yes, sir.

The CHAIRMAN. You are the treasurer?

Mr. PHIPPS. Yes, sir.

The CHAIRMAN. You do not have anything to do with the operating or engineering features?

Mr. PHIPPS. No, sir. I started to work out in Goldfield about 15 years ago, and worked in Goldfield and in reading meters, and doing work in the power plant over at Bishop Creek at that time; but I have been quite out of touch with the operating end of the game; and when I was in the Army, of course, I was out of touch entirely with the affairs of the company.

Mr. SWING. Will you not be frank with us on just one thing? Mr. PHIPPS. I can not be anything else, Mr. Swing.

Mr. SWING. I thought you would be; and that is why I asked. Why is your company fighting the all-American canal?

Mr. PHIPPS. The committee requested Mr. West's views and opinions on these various matters. I believe he got the assistance of Mr. Means in order to present before your committee the best information that he could acquire. And they have come on here and given you what information they could.

Mr. SWING. As I understood, the committee asked Mr. West to come on here to answer questions. There was no intimation that they desired your company to go to the expense of hiring a highpriced engineer to prepare a statement in advance; and no questions had been asked; and they have come on here with an attack upon the all-American canal, all prepared and ready. Can you tell me why your company is making that fight?

Mr. PHIPPS. No, sir.

Mr. SWING. You can not see any reason, from the point of view of your Denver offices, can you?

Mr. PHIPPS. I do not believe the matter was taken up with the Denver office, or that it was considered in any way; but the hearings of your committee are on the Swing-Johnson bill; and, just to my untutored mind, I have really been wondering, as I have heard this hearing the last two days, what the relation was between the allAmerican canal and the Boulder Canyon Dam in the same bill. I never knew why.

Mr. SWING. I will explain it to you: The all-American canal is the father of the Boulder dam. There never was any thought of legislation authorizing a big dam until we first come here and urged the all-American canal. Then, having the question raised as to the sufficiency of the water supply, the suggestion was made that it was necessary to have a storage dam, to make sure of the supply

for the lands.

Mr. PHIPPS. I have heard that.

Mr. SWING. Now you really do not think, do you, that the contention that you are interested in this because of the taxes which are levied is the complete explanation of your opposition: that is not all of it, is it?

Mr. PHIPPS. Now, can I have that question again, please? You started out with asking me if I did not really think something, and I got lost before you got to the end of it.

Mr. SWING. Well, I will ask you this question: Will you say that, because it might increase some taxes by the Imperial Ice & Development Co., that is the real reason why the Southern Sierras Power Co. is here opposing it?

Mr. PHIPPS. I would look at the matter myself from the standpoint of the welfare of the people of that community; and to-day this information that has come out here has aroused a grave doubt in my mind if it is an advisable thing for the people of that community.

Mr. SWING. Well, do you busy yourself, and do your companies busy themselves, with the local plans for improvement in different communities where you happen to be selling power? And do you undertake to tell the cities that they ought or ought not to make this permanent improvement, or that permanent improvement? That is not the policy of your company, is it?

Mr. PHIPPS. Not that I know of. And yet when our opinion is asked, we naturally express our opinion; and we try to be tolerant of the opinions of others-just as all of you gentlemen have to be in Congress here.

Mr. SWING. In this case, you did not wait to be asked your opinion of the all-American canal, and it was volunteered by you.

Mr. PHIPPS. I did not express any opinion.

Mr. SWING. Well, in that statement which was read.

Mr. PHIPPS. But the all-American canal is included in the bill; and Mr. West was asked to appear on the bill.

Mr. SWING. Now, as to the question of preferred taxes, is it not a fact that, in your ice business, which is the business of the Imperial Ice & Development Co.-that is their business. is it not?

Mr. PHIPPS. Yes, sir.

Mr. SWING. Is it not the fact that you add on to the cost of production your taxes, and add them on to the cost of the production. and the sale of the ice: is that not the practice?

Mr. PHIPPS. I believe that almost every business man and manufacturer passes on to the ultimate consumer as much of local taxes, or Federal taxes, or any other kind of taxes that he has to pay, as he can.

Mr. SWING. Yes.

Mr. PHIPPS. And everybody gets "stung" except the poor farmer. Mr. SWING. And you have a monopoly of the ice business in Imperial Valley?

Mr. PHIPPS. We only have a monopoly of the ice business in the Imperial Valley because nobody else has wanted to build ice plants in there, and because we have sold ice just as cheaply as we could, with a reasonable profit; and it would be very poor business for us to attempt to gouge the public on prices of ice, because somebody else would immediately enter that field, because it would be too profitable to be left alone.

Mr. SWING. You have been able to sell all of the ice that it is possible for you to make in Imperial Valley, have you not?

Mr. PHIPPS. We always have some ice that is left over in storage; and we have had to make a very considerable investment, and we have had to take a very considerable chance, really, in spending perhaps $2,000,000 in the last couple of years in enlargements to ice plants in order to meet the demands of the people of the Imperial Vally, so that their wonderful growth in the shipment of canteloupes and lettuce could be met. And we try to do our best to fill the needs of that community for ice.

Mr. SWING. You actually have to manufacture ice at Coachella, and ship it down there to supply the full demands of Imperial Valley; has that not happened?

Mr. PHIPPS. That very probably is true, though I do not know about the operating details of that company. But it would seem to me very foolish to put in ice plants that would take care of all of the canteloupes and all of the lettuce that might be shipped from the Imperial Valley, because there might be a crop failure: and where some of that ice, the little top margin, can be supplied economically from another source, it is just as well to let it be supplied from another source.

Mr. SWING. Then, to sum it up, this is true: You have a monopoly in the ice business in the Imperial Valley; you can sell all the ice you make, if not more; and any taxes you pay you pass on to the consumer; therefore, the contention that you are opposing the allAmerican canal because it will add to your taxes is not a very sound explanation of your opposition, is it?

Mr. PHIPPS. I do not believe I made any such contention. (Laughter). Now,.of course, these questions are so involved that one really never knows where they start and stop.

Mr. SWING. Well, as vice president and treasurer-I am speaking of your company; of course, when Mr. West speaks as the oracle of your company, he speaks for your company and with the authority of your company, does he not, in this instance?

Mr. PHIPPS. Well, I think in operating matters I would be inclined to defer to his judgment, because he is more familiar with those matters than I am.

Mr. SWING. Then you still think the reason why you are opposing the all-American canal is because it will add to the taxes which the Imperial Ice & Development Co. will have to pay?

Mr. PHIPPS. Well, I think that is really a question that belonged to Mr. West instead of me.

Mr. SWING. No; but I thought you would be frank about it; that is why I asked you. I will let the question go.

The CHAIRMAN. I think I would. [Laughter.]

Mr. RAKER. Let me ask a question there. You know some times the smiling boys take the witness stand and "do" a fellow.

Mr. PHIPPS. I would be afraid to do that to you-I hope I am not getting too informal with the committee.

Mr. RAKER. Not at all; not at all; you have been doing very nicely indeed. I kind of like that smiling way; it always catches a fellow. Are you a director on either one of these corporations? I did not ask you that before.

Mr. PHIPPS. Yes, sir; I am a director of most of them; that is, of the list of the nine companies.

Mr. RAKER. Yes; but are you not a director of the holding company also?

Mr. PHIPPS. Yes, sir.

Mr. RAKER. Then you sit in and participate in and act upon determining the policies of the company, as one of the directors?

Mr. PHIPPS. But not as far as operating details are concerned. Mr. RAKER. No-just a moment; get my question: I say that you participate with and act with the directors of the holding concern and discuss the policies of that concern with them?

Mr. PHIPPS. Yes, sir.

Mr. RAKER. And your vote will go with that of the other directors to anything that relates to handling the property of any of these concerns of which you are a member of the board of directors: is that not right?

Mr. PHIPPS. Well, we really do not vote very much on things; we sort of sit down and discuss them, just as you gentlemen discuss them, and come to some conclusions that are satisfactory.

Mr. RAKER. I will put it this way: There is a general discussion. and no objection, and it goes as the action of the corporation-the board of directors: you sort of generally agree on what you are going to do?

Mr. PHIPPS. Yes, sir.

Mr. RAKER. There is no dissension on the part of the board of directors; it does not require an Aye and No vote?

Mr. PHIPPS. Yes, sir.

Mr. RAKER. That being the case, then, you are familiar with the policies of the companies: that is what I am trying to get at. Mr. PHIPPS. I try to be as familiar as possible.

Mr. RAKER. Very well. Being thus familiar with the policies of the company, you believe that the development of the Colorado River so far as electric development is concerned, should be left to private companies, instead of the Government doing it as representing the sentiment of your company?

Mr. PHIPPS. Well, I can not speak for all of the other directors; but my impression is that it would probably be very much better for the Government to have the development made, under some